Assuming it runs faultlessly on DC rail power then proceed as below. If it has any hesitancy to start or runs generally poor on DC then do not attempt a conversion as It will become far worse on DCC! If it is a poor runner try servicing it and retest running, but if still poor do not convert!
1) Remove the (Blue) capacitor and discard it.
EXTREMELY IMPORTANT....
2) Remove all wires from the two brush strips. Keep these wires as they are needed later.
3) Test with a multimeter set to Ohms or if the meter has one the buzzer continuity function Or use a buzzer and battery and two test leads to check that there is no connection from either brush strip to the wheels or metal of the motor chassis. It is highly likely the left hand strip is in connection to the wheels and metal! IF THERE IS A CONNECTION THIS MUST BE REMOVED BEFORE PROCEEDING FURTHER
Failure to test and there is a connection will result in immediate and fatal decoder failure.
4) Assuming no connection is seen, or one seen has been removed, then connect decoders Grey and Orange wire to the brush strips
5) Make soldered in line joints from the decoders Red and Black wires to the
*two wires
* (see note below) previously removed from the motor. Cover joints with heat shrink tubing slid on before making the joints or use quality PCV insulating tape.
Note:** If there was no wire on the left hand strip and the connection has been removed to the wheels and metal chassis from that strip, then the decoder Black wire will have to be fitted to a metal part of the chassis somehow.
6) Test loco on the Programming track and if all ok change decoders address number to whatever is wished (Not 03)
7) Test loco minus the body on the main track. If the loco runs in reverse direction from that shown on the controller, swap the two wires on the motor brush strips. (Note this can also be done via CV29, but with the body still off its simple to swap the two wires Orange and Grey on the brush strips around)
8) Refit body and enjoy,